We’ve already covered how the upcoming Transparency in Coverage rule affects TPAs, so now it’s health plans’ turn! To catch you up, the IRS, Department of Labor, and Department of Health and Human Services have issued the Transparency in Coverage rule. The rule states that employer-sponsored group health plans and health insurance issuers in the individual and group markets will be required to make cost-sharing information available upon request to members, their beneficiaries, or enrollees. The rule technically goes into effect on January 1st, 2022 but requirements for compliance will not begin until July 1st, 2022.

So if you’re a health plan that falls under the categories listed above, you will need to provide:

• Negotiated rates for all covered items and services between your plan and in-network providers.
• Historical payments to, and billed charges from, out-of-network providers.
• In-network negotiated rates and historical net prices for all covered prescription drugs by your plan.
• A self-service tool for enrollees to get personalized out-of-pocket cost estimates for care. 

Big impacts on health plans.

Health plans typically don’t disclose their negotiated rates, so that requirement alone is a huge impact on most payers. This rule will create significant work for health plans to gather all the rates and data they need and display it in an easily readable way. We predict that new jobs (possibly temporary, possibly permanent) may arise to fill this need. 

We also suspect that once behind-the-door negotiated rates become available, there may be a reckoning for health plans with the highest rates. Look at what’s happened to many hospitals since the Hospital Price Transparency rule came out. Health plans will need to prepare for any potential bad press once the Transparency in Coverage rules goes into effect. And if your health plan is hoping the rule won’t happen, you might want to think again. A lot of hospitals hoped for the same thing when the Hospital Price Transparency rule came out, and even sued to stop the rule. But it still went into effect on January 1st.

The other big impact this new rule will have on health plans is the requirement for a self-service tool for enrollees to get personalized out-of-pocket cost estimates for care. Some health plans already have digital features that potentially fulfill this need, so they’re ahead of the curve. But for health plans that don’t have this feature, or their current one isn’t up to par, we foresee a jump in partnerships with digital health companies. Specifically, companies that can help health plans become compliant with the self-service part of the Transparency in Coverage requirements. If your health plan really wants to get a head start, you can request a demo of our platform. The PointHealthTech app allows your members to shop and compare medical care and medications based on their coverage.

Things to think about.

There are still a lot of questions and uncertainties about this new rule. Especially on the specifics of how employer-sponsored group health plans and health insurance issuers in the individual and group markets can be compliant with the rule. But now that you know the Transparency in Coverage rule is coming, you can prepare by creating a game plan for:

• Gathering negotiated rates for all in-network providers and services.
• The added burden of analyzing and publishing this data.
• Partnering with a digital health company to help fulfill the need for a self-service feature.